Police allege the West Hoxton man was caught with equipment to make the lethal weapons as well as three large knives.

One of the guns was allegedly found in the car of John Romeo during a roadside stop at Padstow last month.

Mr Romeo is now before the courts charged with several weapons and drug offences after police allegedly found the pen gun, five rounds of ammunition, four grams of the drug ice and four mobile phones.

FAOCS commander Detective Superintendent Mick Plotecki said the guns could kill at close range.

"They are not particularity accurate, don't have a barrel, but if they get in close they can inflict the same wound as a .22 - so they can kill," Superintendent Plotecki said.

"The concerning part, [is that] they are a relatively simple weapon to conceal and they do pose a threat."

Superintendent Plotecki said the pen guns had been tested by ballistics and there was more than a one-in-four chance of them exploding in the hands of those who fire them.

"The material they use is very soft metal and lot of them don't realise that [the chance of explosion] is quite significant," he said.

Pocket-sized guns are usually imported from Korea and China, and this was the first case for some time where the guns had been tracked back to an Australian manufacturer.

"They come over two or three times a year. Different styles will appear, guns disguised as mobile phones, guns as [key] clickers for cars. You can pretty much manufacture them to look and be like anything."

Superintendent Plotecki said there was no information to suggest the golden guns had been used in any shootings.

In 2012, police found a 26-year-old beautician in possession of a keyring that doubled as a golden, double-barrel .32 calibre gun.

A court heard at the time that the woman was stopped by police during a random breath test and they allegedly found a "key chain, double-barrel firearm with a .32 calibre bullet in the chamber". A second bullet was allegedly found in her handbag.

The woman told Balmain Local Court she thought it was a padlock someone had dropped in her bag.

Mr Kemp, who was on employment benefits when he was arrested, will face 12 charges in court next month related of the manufacture of firearms.

Officers have made contact with hardware store retailers and asked them to contact police if anyone buys gun-making materials in bulk.